1. Heard learned counsel for the parties.
2. Rule. Rule returnable forthwith. By consent of the counsel for the parties, this petition is being heard finally.
3. By this petition filed under Article 226 of the Constitution of India, the Petitioner is challenging the issuance of Form SVLDRS-3 No. L060320SV301216 dated 06-03-2020 against the Declaration No. LD2712190008894 dated 27-12-2019 filed in Form SVLDRS-1 under Section 125 of the Finance Act, 2019 (the "Finance Act") and the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 (the "SVLDRS Rules") made under Section 120 of the said Finance Act which, inter alia, requires the Petitioner to deposit an amount of Rs. 2,19,82,499/- as against Rs. 71,11,033.80/- initially approved in Form SVLDRS-2 No. L210220SV200524 dated 21-02-2020 on the ground of violation of the principles of natural justice. The Petitioner is also challenging the inaction on the part of Respondents 3 and 4 in not disposing of the application filed by the Petitioner seeking rectification of the error in form SVLDRS-3 issued to the Petitioner.
4. The Petitioner is a company incorporated under the Companies Act, 1956 and is engaged, inter alia, in the business of providing services in the field of Information Technology Software Services such as software development, software support services and IT enabled services (i.e. BPO services) primarily to customers located outside India.
5. The Respondent Nos. 3 and 4 are members of the Designated Committee of Mumbai East Commissionerate, constituted under Section 126 of the Finance Act.
6. It is submitted on behalf of the Petitioner that it has units registered as Software Technology Park under the Software Technology Parks of India Scheme in accordance with provisions of Foreign Trade Policy and some other units of the petitioner are located inside the Special Economic Zones under the Special Economic Zone Act, 2005. It is submitted on behalf of the Petitioner that after its merger with IGate Global Solutions Ltd., with effect from 16.12.2016, the name of I-gate Global Solutions Ltd. was changed to Capgemini Technology Services India Limited and it obtained a centralized service tax registration in Form ST-2 for all registered premises pertaining to Mumbai unit. It is further submitted that CAP Gemini SAS, France which is part of the CAP Gemini Group trains the employees/personnel of the Petitioner and the Petitioner bears the entire expenditure for such training in foreign currency for which it has made the necessary Related Party Disclosures in its Balance Sheet. It is submitted that the records of the Petitioner for the period FY 2007-08 to 2008-09 were subjected to EA-2000 audit in the month of August 2009 by the officers of the Central Excise, Mumbai-II and Service Tax audit by the officers of Service Tax, Mumbai-II in addition to audit from the office of the Comptroller and Auditor General of India. It is submitted that in the EA-2000 audit, it was observed that the Petitioner has paid/incurred the expenditure in foreign currency on account of various services received from outside India; the Petitioner was therefore liable to pay service tax on the services received in India as a recipient of service under the reverse charge mechanism to which the Petitioner had made detailed submissions stating that the said amounts were paid to CG SAS France, for the training of their staff and that since such services were performed outside India, no service tax is payable on the said services. It is also submitted that in case where the training was provided online, the Petitioner had discharged its service tax liability. It is further submitted that for the periods 2007-08 to 2011-12 and 2012-13 the Petitioner was issued two show-causes notices demanding service tax alongwith applicable interest and penalties totaling Rs. 3,66,37,498/- and that the Petitioner replied to the said notices and was also granted personal hearing by the adjudicating authority.
7. It is submitted that vide its Order-in-Original No. 79-80, CGST/NM/Commr/KV/2018-19 dated 28-03-2019 the adjudicating authority rejected the submissions made by the Petitioner and passed an order which is annexed at Exhibit-F to the petition making a total demand of Rs. 3.66 crores towards service tax dues as well as penalty. The Petitioner submits that despite the fact that the Petitioner had deposited Rs. 2.93 Crores out of the total demand of Rs. 3.66 crores, the adjudicating authority had passed the order dated 28-03-2019 inter alia holding that the said payment of tax was not towards the training services received from CG SAS. Being aggrieved by the said order dated 28-03-2019, the Petitioner filed Appeal No. ST/87028/2019 under Section 86 of the Act on 12.07.2019.
8. It is submitted on behalf of the Petitioner that pending final hearing of the appeal, the Sabka Vishwas (Legacy Dispute Resolution) Scheme (the "SVLDR Scheme") was enacted vide Chapter V of the Finance Act after which the SVLDRS Rules were framed. It is submitted that the objective of the Scheme is to liquidate legacy cases of Central Excise and Service Tax that are subsumed in GST and are pending in litigation at various fora. On behalf of the Petitioner, it is submitted that under the SVLDR Scheme, amnesty is allowed by offering an opportunity to the tax payers to pay the outstanding tax and be free of any other consequences under the law. It is submitted that the Scheme was initially valid till 30-06-2019 and provides substantial relief in the tax dues for all categories of cases as well as full waiver of interest, fine, penalty and complete amnesty from prosecution. Thereafter, vide Circular dated 29-10-2019 it was clarified by the Central Board of Indirect Taxes and Customs (the "CBIC") that even for cases where appeals were filed after 30-06-2019, if the tax payer withdrew the appeal and furnished an undertaking to the department in terms of para-2 (viii) of Circular No. 1072/05/2019-CX dated 25-09-2019, such taxpayers could file a declaration under the Scheme.
9. It is submitted on behalf of the Petitioner that on the basis of the above, the Petitioner filed declaration No. LD2712190008894 dated 27-12-2019 in form SVLDRS-1 online in Arrears category submitting an amount of arrears as being Rs. 3,66,37,498/- and the pre-deposit/other deposits being Rs. 2,47,85,775/- and the tax dues payable less tax relief being Rs. 71,11,033.80. The Petitioner submits that pursuant to filing of aforesaid declaration in form SVLDRS-1, the Petitioner's appeal was dismissed as withdrawn by the Tribunal by its order dated 24-02-2020. It is submitted by the Petitioner that the Petitioner was issued Form SVLDRS-2 No. L210220SV200524 dated 21-02-2020 granting personal hearing on 24-02-2020 with the remark "The tax dues calculated in SVLDRS-1 amounting to Rs. 71,11,033/- is correct and liable to the paid."
10. It is submitted on behalf of the Petitioner that since the amount payable as per Form SVLDRS-2 was the same as that declared by the Petitioner in Form SVLDSR-1, the Petitioner filed its reply in Form SVLDRS-2A dated 25-02-2020 agreeing with the estimated amount in Form SVLDSR-2 issued by the Respondents. The relevant extract of Form SVLDRS-2A is quoted as under:-
"Do you agree with the Estimate in SVLDRS-2 Number: Yes."
11. However, the Designated Committee under the Scheme issued Form SVLDRS-3 no. L060320SV301216 dated 06-03-2020 calculating the estimated amount payable under the SVLDR Scheme as Rs. 2,19,82,499/-. The Petitioner submits that the Petitioner was surprised by the amount calculated as payable as the Designated Committee did not grant any benefit of the amount deposited/pre-deposited by the Petitioner, being beyond the declaration and acceptance.
12. Subsequently under Section 128 of the Finance Act read with Rule 6(6) of the SVLDRS Rules, the Petitioner made an application for rectification of mistake apparent on record vide its letter dated 13-03-2020 requesting the Designated Committee to issue revised Form SVLDRS-3 after granting the benefit of the amount of Rs. 2,47,85,775/- deposited/pre-deposited by the Petitioner. Documentary evidence demonstrating the deposit of the aforesaid amount was also submitted subsequently. The Petitioner also sent emails dated 27-03-2020 and 01-04-2020 requesting the Designated Committee to issue revised Form SVLDRS-3 showing the estimated amount payable as Rs. 71,11,033.80/-. It is submitted that vide email dated 30-05-2020, Respondent no. 3 directed the Petitioner to make the payment of amount due under the SVLDR Scheme in response to which the Petitioner requested for revised Form SVLDRS-3 after considering the rectification application, after which they would make payment. It is submitted that vide e-mail dated 09.06.2020, the Petitioner requested the Designated Committee to seek the verification report from the jurisdictional authority for verification of tax paid challan and issue revised Form SVLDRS-3 since the due date was 30.06.2020. The Petitioner made further request vide its e-mail dated 12-06-2020 to the Designated Committee to consider the rectification application and issue the revised Form SVLDRS-3. However, it is submitted by the Petitioner that despite efforts, the Petitioner has not received any response from the department nor the Designated Committee has issued revised Form SVLDRS-3 and therefore, the Petitioner has been constrained to file this petition seeking the following reliefs:-
"(a) this Hon'ble Court be pleased to issue a Writ of Certiorari or a writ in the nature of Certiorari or any other writ, order or direction under Article 226 of the Constitution of India calling for the records pertaining to the Petitioner's case and after going into the validity and legality thereof to quash and set aside Form SVLDRS-3 dated 6 March 2020 issued by the Respondent No. 3 and 4;
(b) this Hon'ble Court be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other writ or order or direction under Article 226 of the Constitution of India ordering and directing the Respondents by themselves and/or their officers and/or subordinates to forthwith issue revised Form SVLDRS-3 indicating the amount payable of Rs. 71,11,033.80/- as per Form SVLDRS-2 already issued by the DC and accepted by the Petitioner and refund of any amount deposited by the Petitioner in excess of Rs. 71,11,033.80/- during pendency of the Writ Petition to bona fide spirit of honouring the scheme;
(c) for ad-interim relief in terms of prayer (b) above;
(d) during the pendency of this petition, this Hon'ble High Court be pleased to direct the Respondents to maintain status-quo and not to initiate coercive action against the Petitioner for recovery of the demand confirmed vide Order-in-Original dated 28.03.2019.
(e) for costs of this Petition.
(f) such other and further order or orders as may be deemed just and proper in the facts and circumstance of the present case."
13. Petitioner has also filed additional affidavit, inter alia, stating that the Petitioner has made payment of the amount of Rs. 2,19,82,499/- under protest as per Form SVLDRS-3 strictly without admitting the said liability and subject to outcome of the Petition. It is further submitted therein that even while this petition is pending before this Court, the Designated Committee had on 03-07-2020 issued Discharge Certificate in Form No. SVLDRS-4 No. L030720SV400980 for full and final settlement of tax dues under Section 127 of the Finance Act (No. 2) read with Rule 9 of the SVLDR Scheme at the aforesaid amount.
14. The Respondents have filed reply affidavit, inter alia, stating that the amount of Rs. 2,47,85,775/- claimed as pre-deposit does not clearly reflect that the same is in relation to the amount claimed by the Petitioner as pre-deposit. It is submitted that the two show-cause notices involved a period spread over 6 years from 2008-2009 to 2012-2013 and the reference of 63 challans spread over these 6 years cannot be specifically said to be towards payment of the particular arrears or pertaining to some other case or regular payment of some other unit and hence the deduction of Rs. 2,47,85,775/- from the total dues as claimed by the Petitioner is incorrect. It is also submitted that although the amount mentioned in SVLDRS-2 was Rs. 71,11,033/-, while issuing SVLDRS-3 the issue of eligibility of the amount of Rs. 2,47,85,775/- was considered which the Designated Committee did not find eligible based on the verification report furnished by the jurisdictional divisional office and therefore the SVLDRS-3 was issued for an amount of Rs. 2,19,82,499/-. It is also submitted by the Respondents that the details in Form SVLDRS-2 are automatically generated on the basis of details given in Form SVLDRS-1 by the Petitioner only and it never confirms acceptance of figures and that issuance of SVLDRS-2 is not the final stage as issuance of SVLDRS-3 and the final discharge certificate in Form SVLDRS-4 are further procedures to be carried out. It is submitted that final quantification of tax dues is determined while issuance of Form SVLDRS-3 and thereafter on payment, the final discharge certificate is issued in Form SVLDRS-4 after verification/re-verification at every stage. It is submitted that during the course of such verification, the quantification of amount claimed as pre-deposit is considered as NIL. It is submitted by the Respondents that the Petitioner's rectification representation for re-consideration of SVLDRS-3 was taken up by the Designated Committee and after due consideration of the facts and after minutely examining the matter, it was held that the tax dues should be determined by excluding the amount claimed as pre-deposit of Rs. 2,47,85,775/-. It is also submitted that although there is a provision for issuance of rectified SVLDRS-3 since there was no change in the amount of tax dues after re-consideration, no rectified SVLDRS-3 was issued to the Petitioner. It is also stated that though an opportunity of personal hearing after issuance of SVLDRS-2 was granted to the Petitioner on 24.02.2020, the Petitioner did not appear.
15. In rejoinder the Petitioner has vehemently opposed and disputed the above submissions made by the Respondents as contrary to the scheme, notifications, circulars and guidelines stating that the action of the Respondents has defeated the purpose of the Scheme by failing to accept the claim of the Petitioner.
16. We have heard Mr. Prasad Paranjape, learned Counsel for the Petitioner and Mr. Sham Waive, learned Counsel for the Respondents. We have also perused the material on record.
17. At the very outset, it would be apposite to refer to the Statement of Objects and Reasons as well as relevant Sections of the Finance (No. 2) Act, 2019 which deal with Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The Statement of Object and Reasons to the Finance Bill for the financial year 2019-20 with respect to the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 is as under.
"The Scheme is a one time measure for liquidation of past disputes of Central Excise and Service Tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration. The Scheme shall be enforced by the Central Government from a date to be notified. It provides that eligible persons shall declare the tax due and pay the same in accordance with the provisions of the Scheme. It further provides for certain immunities including penalty interest or any other proceedings under the Central Excise Act, 1944 or Chapter V of the Finance Act, 1994 to those persons who pay the declared tax dues."
18. Chapter V of the Finance Act dealing with the SVLDR Scheme, inter alia, provides for the relief available under the Scheme, declaration to be made under the Scheme, verification of declaration by Designated Committee, issue of statement by Designated Committee, rectification of errors, issue of Discharge Certificate by Designated Committee, power to make rules, power to issue orders, instructions, etc. The relevant sections of the Scheme are quoted as under:-
"124:-Relief available under Scheme:-
(1) Subject to the conditions specified in sub-section
(2) the relief available to a declarant under this Scheme shall be calculated as follows:-
(a) where the tax dues are relatable to a show cause notice or one or more appeals arising out of such notice which is pending as on the 30th day of June, 2019 and if the amount of duty is,-
(i) rupees fifty lakhs or less, then, seventy per cent, of the tax dues;
(ii) more than rupees fifty lakhs, then, fifty per cent, of the tax dues;
(b) where the tax dues are relatable to a show cause notice for late fee or penalty only, and the amount of duty in the said notice has been paid or is nil, then, the entire amount of late fee or penalty:-
(c) where the tax dues are relatable to an amount in arrears, and,-
(i) the amount of duty is, rupees fifty lakhs or less, then, sixty per cent, of the tax dues;
(ii) the amount of duty is more than rupees fifty lakhs, then, forty per cent, of the tax dues;
(iii) in a return under the indirect tax enactment, wherein the declarant has indicated an amount of duty as payable but not paid it and the duty amount indicated is,-
(A) rupees fifty lakhs or less, then, sixty per cent, of the tax dues;-
(B) amount indicated is more than rupees fifty lakhs, then, forty per cent, of the tax dues;
(d) where the tax dues are linked to an enquiry, investigation or audit against the declarant and the amount quantified on or before the 30th day of June, 2019 is--
(i) rupees fifty lakhs or less, then, seventy per cent, of the tax dues;
(ii) more than rupees fifty lakhs, then, fifty per cent, of the tax dues;
(e) where the tax dues are payable on account of a voluntary disclosure by the declarant, then, no relief shall be available with respect to tax dues.
(2) The relief calculated under sub-section (1) shall be subject to the condition that any amount paid as predeposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry investigation or audit, shall be deducted when issuing the statement indicating the amount payable by the declarant:
Provided that if the amount of predeposit or deposit already paid by the declarant exceeds the amount payable by the declarant, as indicated in the statement issued by the designated committee, the declarant shall not be entitled to any refund.
125. Declaration under Scheme.
(1) All persons shall be eligible to make a declaration under this Scheme except the following, namely:--
(a) who have filed an appeal before the appellate forum and such appeal has been heard finally on or before the 30th day of June, 2019;
(b) who have been convicted for any offence punishable under any provision of the indirect tax enactment for the matter for which he intends to file a declaration;
(c) who have been issued a show cause notice, under indirect tax enactment and the final hearing has taken place on or before the 30th day of June, 2019;
(d) who have been issued a show cause notice under indirect tax enactment for an erroneous refund or refund;
(e) who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019;
(f) a person making a voluntary disclosure,--
(i) after being subjected to any enquiry or investigation or audit; or
(ii) having filed a return under the indirect tax enactment, wherein he has indicated an amount of duty as payable, but has not paid it;
(g) who have filed an application in the Settlement Commission for settlement of a case;
(h) persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944;
(2) A declaration under sub-section (1) shall be made in such electronic form as may be prescribed.
126. Verification of declaration by designated committee.
(1) The designated committee shall verify the correctness of the declaration made by the declarant under section 124 in such manner as may be prescribed:
Provided that no such verification shall be made in case where a voluntary disclosure of an amount of duty has been made by the declarant.
(2) The composition and functioning of the designated committee shall be such as may be prescribed.
127. Issue of statement by designated committee.
(1) Where the amount estimated to be payable by the declarant, as estimated by the designated committee, equals the amount declared by the declarant, then, the designated committee shall issue in electronic form, a statement, indicating the amount payable by the declarant, within a period of sixty days from the date of receipt of the said declaration.
(2) Where the amount estimated to be payable by the declarant, as estimated by the designated committee, exceeds the amount declared by the declarant, then, the designated committee shall issue in electronic form, an estimate of the amount payable by the declarant within thirty days of the date of receipt of the declaration.
(3) After the issue of the estimate under subsection (2), the designated committee shall give an opportunity of being heard to the declarant, if he so desires, before issuing the statement indicating the amount payable by the declarant:
Provided that on sufficient cause being shown by the declarant, only one adjournment may be granted by the designated committee.
(4) After hearing the declarant, a statement in electronic form indicating the amount payable by the declarant, shall be issued within a period of sixty days from the date of receipt of the declaration.
(5) The declarant shall pay electronically through internet banking, the amount payable as indicated in the statement issued by the designated committee, within a period of thirty days from the date of issue of such statement.
(6) Where the declarant has filed an appeal or reference or a reply to the show cause notice against any order or notice giving rise to the tax dues, before the appellate forum, other than the Supreme Court or the High Court, then, notwithstanding anything contained in any other provisions of any law for the time being in force, such appeal or reference or reply shall be deemed to have been withdrawn.
(7) Where the declarant has filed a writ petition or appeal or reference before any High Court or the Supreme Court against any order in respect of the tax dues, the declarant shall file an application before such High Court or the Supreme Court for withdrawing such writ petition, appeal or reference and after withdrawal of such writ petition, appeal or reference with the leave of the Court, he shall furnish proof of such withdrawal to the designated committee, in such manner as may be prescribed, along with the proof of payment referred to in sub-section (5).
(8) On payment of the amount indicated in the statement of the designated committee and production of proof of withdrawal of appeal, wherever applicable, the designated committee shall issue a discharge certificate in electronic form, within thirty days of the said payment and production of proof.
128. Rectification of errors.
Within thirty days of the date of issue of a statement indicating the amount payable by the declarant, the designated committee may modify its order only to correct an arithmetical error or clerical error which is apparent on the face of record, on such error being pointed out by the declarant or suo motu, by the designated committee.
129. Issue of discharge certificate to be conclusive of matter and time period.
(1) Every discharge certificate issued under section 126 with respect to the amount payable under this Scheme shall be conclusive as to the matter and time period stated therein, and-
(a) the declarant shall not be liable to pay any further duty interest, or penalty with respect to the matter and time period covered in the declaration;
(b) the declarant shall not be liable to be prosecuted under the indirect tax enactment with respect to the matter and time period covered in the declaration;
(c) no matter and time period covered by such declaration shall be reopened in any other proceeding under the indirect tax enactment.
(2) Notwithstanding anything contained in subsection (1),--
(a) no person being a party in appeal, application, revision or reference shall contend that the central excise officer has acquiesced in the decision on the disputed issue by issuing the discharge certificate under this scheme;
(b) the issue of the discharge certificate with respect to a matter for a time period shall not preclude the issue of a show cause notice,-
(i) for the same matter for a subsequent time period; or
(ii) for a different matter for the same time period;
(c) in a case of voluntary disclosure where any material particular furnished in the declaration is subsequently found to be false, within a period of one year of issue of the discharge certificate, it shall be presumed as if the declaration was never made and proceedings under the applicable indirect tax enactment shall be instituted.
130. Power to make rules.
(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Scheme.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-
(a) the form in which a declaration may be made and the manner in which such declaration may be verified;
(b) the manner of constitution of the designated committee an d its rules of procedure an d functioning;
(c) the form and manner of estimation of amount payable by the declarant and the procedure relating thereto;
(d) the form and manner of making the payment by the declarant and the intimation regarding the withdrawal of appeal;
(e) the form and manner of the discharge certificate which may be granted to the declarant;
(f) the manner in which the instructions may be issued and published;
(g) any other matter which is to be, or may be, prescribed, or in respect of which provision is to be made, by rules.
(3) The Central Government shall cause every rule made under this Scheme to be laid, as soon as may be after it is made, before each House of Parliament, while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.
132. Power to issue orders, instructions etc.
(1) The Central Board of Indirect Taxes and Customs may, from time to time, issue such orders, instructions and directions to the authorities, as it may deem fit, for the proper administration of this Scheme, and such authorities, and all other persons employed in the execution of this Scheme shall observe and follow such orders, instructions and directions:
Provided that no such orders, instructions or directions shall be issued so as to require any designated authority to dispose of a particular case in a particular manner.
(2) Without prejudice to the generality of the foregoing power, the Central Board of Indirect Taxes and Customs may, if it considers necessary or expedient so to do, for the purpose of proper and efficient administration of the Scheme and collection of revenue, issue, from time to time, general or special orders in respect of any class of cases, setting forth directions or instructions as to the guidelines, principles or procedures to be followed by the authorities in the work relating to administration of the Scheme and collection of revenue and any such order may if the said Board is of opinion that it is necessary in the public interest so to do, be publish ed in the prescribed manner."
19. Under the Finance Act referred to above, the Central Government made Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules 2019 (the "SVLDRS Rules"), which was amended on 14th May, 2020 and which amendment was published in the Gazette on 21st August, 2019. The relevant portions of the amended SVLDRS Rules are quoted as under:-
"Rule-3. Form of declaration under section 125.-(1) The declaration under section 125 shall be made electronically at https://cbic-gst.gov.in in Form SVLDRS-1 by the declarant, on or before the 15th January 2020.
(2) A separate declaration shall be filed for each case. Explanation.-For the purpose of this rule, a "case" means-
(a) a show cause notice, or one or more appeal arising out of such notice which is pending as on the 30h day of June, 2019; or
(b) an amount in arrears; or
(c) an enquiry or investigation or audit where the amount is quantified on or before the 30th day of June, 2019; or
(d) a voluntary disclosure.
Rule-4. Auto acknowledgment-On receipt of declaration, an auto acknowledgment bearing a unique reference number shall be generated by the system.
Rule-6. Verification by designated committee and issue of estimate, etc.-(1) The declaration made under section 125, except when it relates to a case of voluntary disclosure of an amount of duty shall be verified by the designated committee based on the particulars furnished by the declarant as well as the records available with the Department.
(2) The statement under sub-sections (1) and (4) of section 127, as the case may be, shall be issued by the designated committee electronically, on or before the 31st day of May, 2020 in Form SVLDRS-3 setting forth therein the particulars of the amount payable:
Provided that no such statement shall be issued in a case where the amount payable, as determined by the designated committee is nil and there is no appeal pending in a High Court or the Supreme Court.
(3) Where the amount estimated to be payable by the declarant exceeds the amount declared by the declarant, then, the designated committee shall issue electronically, on or before the 1st day of May, 2020 in Form SVLDRS-2, an estimate of the amount payable by the declarant along with a notice of opportunity for personal hearing.
(4) If the declarant wants to indicate agreement or disagreement with the estimate referred to in sub-rule (3) or wants to make written submissions or waive personal hearing or seek an adjournment, he shall file electronically Form SVLDRS-2A indicating the same:
Provided that if no such agreement or disagreement is indicated till the date of personal hearing and the declarant does not appear before the designated committee for personal hearing, the committee shall decide the matter based on available records.
(5) On receipt of a request for an adjournment under sub-rule (4), the designated committee may grant the same electronically in Form SVLDRS-2B:
Provided if the declarant does not appear before the designated committee for personal hearing after adjournment, the committee shall decide the matter based on available records.
(6) Within thirty days of the date of issue of Form SVLDRS-3, the designated committee may modify its order only to correct an arithmetical error or clerical error which is apparent on the face of record, on such error being pointed out by the declarant or suo motu by issuing electronically a revised Form SVLDRS-3.
Rule-7. Form and manner of making the payment.-Every declarant shall pay electronically the amount, as indicated in Form SVLDRS-3 issued by the designated committee, on or before the 30th day of June, 2020.
Rule-8. Proof of withdrawal of appeal from High Court or Supreme Court.-Proof of withdrawal of appeal or writ petition or reference before a High Court or the Supreme Court, as the case may be, under sub-section (7) of section 127 shall be furnished electronically by the declarant.
Rule-9. Issue of discharge certificate.-The designated committee on being satisfied that the declarant has paid in full the amount as determined by it and indicated in Form SVLDRS-3, and on submission of proof of withdrawal of appeal or writ petition or reference referred to in rule 8, if any, shall issue electronically in Form SVLDRS-4 a discharge certificate under subsection (8) of section 127 within thirty days of the said payment and submission of the said proof whichever is later:
Provided that in a case where Form SVLDRS-3 has not been issued by the designated committee by virtue of the proviso to sub-rule (2) of rule 6, the discharge certificate shall be issued within thirty days of the filing of declaration referred to in sub-rule (1) of rule 3."
20. From the above, we find that as a one time measure for liquidation of past disputes of Central Excise and Service Tax, the SVLDR Scheme has been issued by the Central Government. The SVLDR Scheme has also been issued to ensure disclosure of unpaid taxes by an eligible person. This appears to have been necessitated as the levy of Central Excise and Service Tax has now been subsumed in the new GST Regime. From a reading of the statement of object and reasons, it is quite evident that the scheme conceived as a one time measure, has the twin objectives of liquidation of past disputes pertaining to central excise and service tax on the one hand and disclosure of unpaid taxes on the other hand. Both are equally important: amicable resolution of tax disputes and interest of revenue. As an incentive, those making the declaration and paying the declared tax verified as determined in terms of the scheme would be entitled to certain benefits in the form waiver of interest, fine, penalty and immunity from prosecution. This is the broad picture the concerned authorities are to keep in mind while dealing with a claim under the scheme.
21. It is not in dispute that the Petitioner is an eligible person. The Petitioner filed a declaration in Form SVLDRS-1 on 27-12-2019 as per Rule 3 of the SVLDRS Rules for relief under Section 124(1)(c)(ii) of the Finance (No. 2) Act, 2019. Thereafter SVLDRS-2 was issued by the Designated Committee. As per Rule 6(3) of the SVLDRS Rules, this form is issued along with an estimate of the amount payable by the declarant along with notice of an opportunity for personal hearing. It is also not in dispute that Form SVLDRS-2 states that the estimated tax payable by the petitioner under the Scheme is Rs. 71,11,033.80. The Petitioner also withdrew its appeal filed before the Tribunal as required under the SVLDRS Rules on 24.02.2020. It appears that since the amount of tax payable as claimed by the Petitioner in Form SVLDRS-1 was the same as indicated by the Respondents in Form SVLDRS-2, the Petitioner did not object and filed Form SVLDRS-2A on 25.02.2020, accepting the said amount of Rs. 71,11,033.80 as payable to the Respondents. However, vide Form SVLDRS-3 dated 06-03-2020. an amount of Rs. 2,19,82,499/- was stated to be payable by the Petitioners. Thereafter, the Petitioner made a rectification application on 13.03.2020 to the Designated Committee but despite reminders to consider the rectification application and issue revised SVLDRS-3, the Designated Committee did not respond. Since the last date to make payment to avail of the benefit under the Scheme as per the Taxation and Other Laws (Relaxation of certain Provisions) Ordinance 2020 dated 31.03.2020 was 30.06.2020, the Petitioner filed this Petition. H
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owever, since the matter could not be listed before 30.06.2020, the Petitioner has made the payment of the said amount electronically and also filed a letter dated 30.06.2020 stating that the said payment is under protest and strictly without prejudice to the claim of refund in the pending Writ Petition. The verification report as furnished by the jurisdictional divisional commissioner referred to in the Reply Affidavit on the basis of which From SVLDRS-3 for an amount of Rs. 2,19,82,499/- has been claimed to be issued, has admittedly not been shared with the Petitioner. If an opportunity for personal hearing as contemplated in Rule 6(3) of the SVLDRS Rules was given to the Petitioner pursuant to Form SVLDRS-2 with an estimate of an amount of Rs. 71,11,033.80 payable by the declarant, which amount has been accepted by the Petitioner pursuant to Form SVLDRS-2A in accordance with Rule 6(4) of the SVLDRS Rules, then, we do not see any reason as to why when the amount payable is sought to be enhanced from Rs. 71,11,033.80 to Rs. 2,19,82,499/- no such opportunity of hearing was granted to the Petitioner. If at all the Designated Committee wanted to increase the payable amount, the least they should have done was to give an opportunity of hearing to the Petitioner after affording the Petitioner an opportunity to review the report of the jurisdictional divisional commissioner. 22. With respect to the rectification application made by the Petitioner under Section 128 of the Finance Act, it has been stated by the Respondents in their reply that they have considered the same but since there was no change in the amount after certification from the concerned authorities, they have not issued a revised SVLDRS-3. No order has been passed as contemplated under Section 128 of the Finance Act. This is not acceptable. 23. According to us, the action and conduct of the Respondents in firstly accepting the amount stated to be payable by the Petitioner under the Scheme and issuing SVLDRS-2 of the said amount and then without the knowledge or notice or an opportunity of hearing to deal with the report of the jurisdictional divisional commissioner issuing SVLDRS-3 for an amount of Rs. 2,19,82,499/- as against Rs. 71,11,033/- as accepted in Form SVLDRS-2A by the Petitioner is grossly in violation of the principles of natural justice. It is axiomatic that when a person is visited by adverse civil consequences, like enhancement of dues, principles of natural justice like notice and hearing would have to be complied with. Non-compliance would impeach the decision making process rendering the decision invalid in law. 24. Also the failure of the Respondents to pass an appropriate order under Section 128 of the Finance Act with respect of the Petitioner's rectification application and merely to state in the Reply Affidavit that since there was no change in the amount after certification from the concerned authorities, they have not issued revised Form SVLDRS-3 is in gross in breach of Rule 6(6) of the SVLDR Rules. 25. We therefore, quash and set aside the Form SVLDRS-3 No. L060320SV301216 dated 06-02-2020 and Form SVLDRS-4 L030720SV400980 dated 03-07-2020 and direct the Designated Committee under the SVLDR Scheme to give an opportunity of hearing to the Petitioner and after considering all the material furnished and submissions made by the Petitioner as well as the payment made by the Petitioner under protest, issue appropriate orders as per law including issuance of revised Form SVLDRS-3 and Form SVLDRS-4 within four weeks from the date of this order. 26. We make it clear that we have not expressed any opinion on the rival contentions of the parties with respect to the merits of the matter. 27. We accordingly allow this petition in the above terms. There shall be, however, no orders as to costs. 28. This order will be digitally signed by the Private Secretary/Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.